This is the prime advice from Dr Barry Devlin, one of the pioneers of Big Data research, on how CIOs can tackle disruption caused by advances in technology.
Uber, Airbnb and other startups are essentially creating a new business model that is technology based, says Devlin, now a business intelligence and big data industry analyst and founder of 9sight Consulting.
“Their focus is entirely on what technology can do to define or transform the business,” he says. “They do not have to deal with the legacy of old IT.”
Uber, for instance, is looking to eliminate the drivers eventually because the driver is the biggest cost, he states, a reference to the start-up’s work on self-driving cars.
“The driverless car is a few years away, but it is certainly on the way.”
But he says the real question traditional organisations always struggle with is, how to migrate from the legacy environment to this new environment.
It becomes a very delicate balance of, how do I maintain this existing business long enough in order to create the space for the new business to grow?
He points out these organisations will always have the ‘Innovator’s Dilemma’ as described by Harvard professor Clayton Christensen.
This is when organisations focus on an existing business, or the ‘cash cow’ and fail to meet the customer’s unstated or future needs.
“It becomes a very delicate balance of, how do I maintain this existing business long enough in order to create the space for the new business to grow?”
This is very much dependent on the industry and the culture of the particular company, says Devlin.
“How do we work collaboratively, as opposed to a top down command and control approach, and much more using the information at the edge of the organisation and not control everything from the centre?
“It is, in a way, turning some of the organisational structures inside out so when new ideas do emerge it is easy for them to be adopted without the naysayers, the higher up and middle management saying, ‘Oh, this won’t work.”
For CIOs and their teams working through this era of disruption, he says education is important.
“There has to be space in the organisation’s budget and time for IT people to be educated in the new technology trends,” he says.
They also need to be educated particularly on how to interact with business people.
From his experience, there are IT professionals who really are only interested in the technology, the tools and the programs.
“Either these guys have to make the change in being more business oriented or they have to be let go in some cases.”
“They are the people that are going to be outsourced if they don’t change.”
“The ability to play with technology at the very basic level of programming and so on is becoming more and more of a commodity,” he explains.
“But the people who understand the technology and its possibilities and drive it down to implementation… these are skills you do not want to outsource.”
Editor’s note: This is part two of CIO New Zealand’s interview with Dr Barry Devlin. In the first part of the interview, he talks about CIOs and the ethics of big data.
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